One thing I know for sure, is an opportunity of a lifetime is upon us...
And my advice is to search and seize it before it goes...
When you watch the news (or read the news), it is getting harder to stay positive and keep smiling. Sensationalised headlines are blasted everywhere: fatalities from Coronavirus, high impact natural disasters, billion dollar sharemarket ‘bloodbaths’, businesses across the spectrum recording losses and political instability – it is hard to keep your chin up with so much conflict being flashed in our faces.
However, one thing I know for sure is that in all the turmoil, there is a blessing, if not many blessings to be found amongst this! This is a time to be wiser with our spending, to be kinder with our charitable giving, more protective of our physical and mental wellbeing, more respectful to our planet, savvier with our earnings and more grounded with our expectations and lifestyle. Essentially boosting our money mindfulness – which will strengthen our financial resilience and serve us greater returns in the future.
So as the media continue to paint an increasingly dark world ahead of us, I myself am using this as time to refresh my own finances, so that I can identify and seize these hidden blessings. And I encourage you to do the same. During economic downturns and market corrections, I recommend looking at 3 important areas in your own finances and actioning tailored solutions to take advantage of the circumstance.
1. Your home loan
We are in a record low interest rate environment. Our parents and grandparents never experienced interest rates like this. The lower the interest rate, the quicker and easier it is to pay down debt and get ahead in life financially.
So start reducing debt in your life and make the most of this “easy opportunity”.
And the timing of this is perfect for you – this week the RBA announced another 0.25% interest rate cut. If your bank hasn’t passed this directly on to you, (including your investment property loans), you need to be going elsewhere, and quickly. Every time interest rates drop, you should be benefiting from this; you stand to save tens of thousands, if not hundreds of thousands of dollars in interest and those new savings can be used to actually help pay down your home loan faster (years faster).This is quite possibly the most valuable advice you will ever get from me if you have a home loan. So my advice to you right now is check your rate and see how it compares to these figures at Athena Home Loans. They are the only lender to pass the last 4 interest rates cuts in full immediately to all their customers, both new and existing. So if you can see a difference between Athena’s rates and what you are paying, I don’t need to tell you who to call but promise me and yourself, you will call today.
2. Your Superannuation
Most Australians have their superannuation invested in a generic default “Balanced” fund. If you know that you are a Balanced Investor, that is fine, but if you are investing for the long run (i.e. 10 years or more) and want to maximise the long term growth and income of your superannuation – you may want to find out what your risk profile actually is and then change it so that your superannuation investment portfolio correctly matches your risk profile. This maximises your chance of retiring when you want and on the income and lifestyle that you want. With current market pull backs, there may be great buying opportunities as you rethink your asset allocation – from switching out of the more conservative investments (such as cash and fixed interest) to more long term growth based investments (such as local and international shares). This shift typically produces more superior returns in both capital growth and income, over the long run, even when you factor in the rollercoaster ride of times like this.
3. Your investments
Just like with your superannuation investment portfolio, you should be thinking about starting your own investment portfolio. Buying and building long term passive income streams, to help diversify your wealth, beyond your home or other lifestyle assets.
The more passive income that you have, the more financial freedom that you have. When stock prices plunge – this can quite often be the grand opening of our financial investment journey, with great buying opportunities. Think of these market corrections as discounts – they give us the benefit of a cheaper, cheeky head start in long term capital growth. Which is why quite often the best time to invest was yesterday, as historically the market always recovers, even from detrimental financial collapses.
Now is your time to consider stepping up and start learning about investing, buying and building long term diversified passive income streams, and even perhaps learn about using the equity within your home to kick start this. Although, make sure you understand all the risks, how to carefully manage them and the benefits to you and your financial goals and wellbeing.
You can also check out Athena’s investment loans here, which are just as competitive as their owner occupied loans. They offer new investor rates of 2.99%var and 2.95%com – one of the lowest on the market
After reading this, I truly hope that beyond the media hysteria and irrational decisions, so you can hear the harmony through the noise and see the positive side that no one reveals. You can use market corrections to your financial advantage, as we are presented with opportunities that may be once in a lifetime.
Canna Campbell is the founder and director of SASS Financial Services, a boutique financial planning firm. She is Channel 9’s exclusive ‘money expert’, founder of financial media platform SugarMamma.TV and best selling author of The $1000 Project and Mindful Money.